Spruce Goose Profile
Opening a busy week of portfolio reviews I figured the Carson would not need much attention as the Bullish Percent Indicator data last Saturday called for a TSLO to be placed on VIS and that would be it. This morning I found that the owner of the Carson added fresh money to the account and that needs to be invested. Follow the logic of how that new money will be put to use in the Carson.
Carson Investment Quiver
Below is the current investment quiver for the Carson. All current holdings are a result of past recommendations. Had Utilities (VPU) remained a Buy, I would have increased the % of portfolio from the current 4.12% up to the recommended 8.0% now that new cash is available. Since Utilities moved out of the oversold zone I’ll make no changes with VPU. How to invest the $6,000 in cash remains the question?
Carson Security Recommendations
Using the BHS investing model and a look-back period of 60- and 100-trading days, I examined the “Dual Momentum” ETFs to see which has the highest rank. The ETFs I am checking on are: VOO, VTI, SPY, VEA, VWO, BND, and ESGV. Of these seven ETFs, VOO with a rank of four (4) is the highest so I set several limit orders to purchase shares of this S&P 500 ETF.
Remember that the following worksheet from the Kipling spreadsheet is not used to manage the sector ETFs. We use BPI data for that guidance.
Carson Manual Risk Adjustments
No changes are planned other than to purchase 14 shares of VOO. Depending on the price of VOO this morning I may be able to place orders for 15 shares. A TSLO is set to sell the 20 shares of VIS.
Carson Performance Data
Since 12/31/2021 the Carson has outperformed the SPY ETF by 12.0% annually. That is a huge delta that will be difficult to maintain.
Carson Risk Ratios
The following data table adds much more information as to how well the Carson is performing. Based on the Information Ratio data the Carson has slipped in performance with respect to the benchmark since last November. The 12.2 Jensen Alpha is one of the highest values, yet still off the high mark reached last April.
Should June and July be strong months for equities we will likely see the slope of the Jensen turn positive. The current value is essentially flat at -0.07.
Tweaking Sector BPI Plus Model: 20 May 2023
Buying Guidelines For BPI Model Portfolios: 9 December 2022
Carson Portfolio Update: 18 November 2022
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Lowell,
It looks like the SS is set for BHS even though you are using DM to decide. Is the BHS that result similar to the DM?
Also I’m not getting descriptions again. I updated my ITA file 6/10.
Bob W.
Bob,
Yes, I have the model set to BHS for the Carson and it will bring up a different set of recommendations than the DM model. The number of maximum assets overrides the model setting.
With the Carson, as well as the other Sector BPI Plus portfolios I first follow the BPI recommendations. If cash is still available I shift to ETFs such as VTI, VEA, VWO etc. and fill those second. These two moves generally use up all available cash.
To obtain descriptions, try clicking on Fix Links and see if that works.
Lowell
Sector BPI Plus portfolio developers: Discretionary (VCR) moved into the overbought zone so I will be placing a TSLO on this ETF.
Lowell
Lowell, can you please remind me of the basis for the %’age that the BPI models use for TSLOs? Is it the volatility stop per the Kipling spreadsheet (eg 13.2% for VDE), is it just a fixed value such as 3%, or are there some subjective factors that come into play?
Thank you.
-Martin
Mark,
Your comment was captured by Spam and that is the reason for the delay of my response.
When a particular sector moves to the 70% bullish or above a TSLO is set for the ETF used to cover that sector. Here is how I handle that move.
TD Ameritrade only permits single digit percentages for the TSLOs. When a sector is in the 70% zone I set a 3% TSLO. If it is in the 80% bullish zone I set a 2% and if it is 90% bullish zone I use a 1% TSLO.
Schwab permits setting decimal percentages. If a sector is 75% bullish I will use a 2.5% TSLO. If the sector is 83.2% bullish I will set a TSLO at 1.3%.
Hope this answers your question.
Lowell
Lowell,
Yes that fixed it. 3% TSLO on VCR?
Bob
Bob W.,
Yes, I would set a 3% TSLO. I checked the four Sector BPI Plus portfolios and none are currently holding any shares of VDC.
Lowell
Bob,
That should read, VCR, not VDC.
Lowell
Lowell,
BTW I sold my VCR after it hit 69.81% on 4/28. I used the TSLO of 3% and it sold on 5/24 at $250.50. Would have been better not to round off to 70%. I would have doubled my profit. As I recall back then we were debating whether to round off when close to a buy or sell.
Bob W.